Geopolitical concerns intensified this week and led to sharp increases in those commodities at risk of disruptions to supply. In particular, the price of aluminium surged following the announcement of US sanctions on the world’s second largest producer, Rusal. Oil was also up strongly on news of a chemical weapons attack in Syria, which raised the prospect of Western military intervention, and missile attacks by Yemen’s Houthis, which appeared to be targeting oil infrastructure in Saudi Arabia.
Looking to next week, markets will continue to monitor closely the escalation in tensions in the Middle East and between the US and Russia. That said, President Trump already appears to be rowing back from some of his more aggressive rhetoric. Away from politics, it is also quite a data-heavy week with China’s March industry data and Q1 GDP (Tuesday) and US manufacturing data (Tuesday). We expect China’s official GDP number to have weakened slightly from 6.8% in Q4 to 6.7%.
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